The tiny island nation of Singapore is set to form a regulatory sandbox where energy technologies and new business can be tested and refined before being launched to the public.

iSwitch, said having a sandbox will allow companies such as theirs to test bold ideas in commercial setting, but still within a controlled environment.

The bold idea was proposed by the Energy Market Authority (EMA) in the hopes of creating a “safe and conducive space” much like what was proposed and adapted in the United Kingdom. In February 2017, the UK’s Office of Gas and Electricity Markets (Ofgem) started a regulatory sandbox to test future developments in the energy sector.

Singapore’s EMA hopes to follow suit and says that while they cannot guarantee error or failure-free systems, the sandbox can provide a safe environment to test these innovations. The move comes at the heels of bold technological changes being developed and rolled out.

Renewable technology and energy storage methods are being created and has created new business models previously unheard of in Singapore. The EMA said the sandbox will also allow then to provide much needed support and regulatory frameworks to different companies.

Sandbox, Boon to Energy Industry

The proposed sandbox has been welcomed by players in various industries. Even though the EMA said it will not be shelling out money for proposals which will be tested in the sandbox, it also won’t impose new charges or fees.

According to reports, the proposals which will be tested in the sandbox cover those that have been newly-introduced to the market. Or, they could be innovations to how technology is currently being used. One caveat though, the proposals should benefit consumers in the gas and electricity industries.

Retailers, for their part, welcomed the proposal and said the regulatory sandbox would be a good way to protect intellectual properties which new businesses have developed.

Singapore’s Red Dot Power, headed by its chairman Vijay Sirse, called the proposal for the sandbox a “proactive one”. His company is working to integrate innovative solutions for battery storage, demand response, as well as e-mobility. Being able to achieve this will significantly lower the cost of the service to customers; however, there’s still no policy framework until now.

Sirse hopes that the creation of the sandbox will be able to fill in the gaps. Another independent retailer, iSwitch, said having a sandbox will allow companies such as theirs to test bold ideas in commercial setting, but still within a controlled environment.

iSwitch’s general manager of wholesale and trading Andrew Koscharsky explained that being tested in a controlled environment would mean that products won’t affect a broader market in case the idea doesn’t work.

The company is working on new payment methods as well as carbon products before Singapore fully implements its carbon tax law in 2019.

According to Rob Khoo, the managing director of a solar quotation comparison and crowdfunding platform called SolarPVExchange, the proposed sandbox will also be beneficial to condominium owners who are looking at converting to solar panels. These owners won’t be able to install solar panels unless they have permission from the condominium’s managing body, which stands as the master tenant.

Khoo explained that they have had to turn down a lot of potential clients because of this. In an attempt to solve the problem, the company installed a meter at each of the units – right where solar energy is generated. They’ve also devised a solution to vary the resistance in the building’s electrical network so the solar energy goes to the intended unit.

The sandbox is a bold idea which stands to benefit small and big players in the emerging energy market. Other countries can benefit from a similar testing ground.